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The business activities of the Deutsche Postbank group differ fundamentally from those of the other companies in the Group. For this reason, we present an additional analysis of the balance sheet indicators under the “Postbank at equity” scenario. In this perspective, Postbank is treated as a financial investment carried at equity.
Net debt comprises financial liabilities less cash and cash equivalents, securities, current financial instruments and long-term deposits. In 2005, net debt increased from €3,991 million to €3,959 million (previous year: €–32 million). This was primarily due to the acquisition of Exel.
For the same reason, the ratio of net debt to the total of equity and net debt combined also rose: net gearing increased from –0.4% to 26.8%.
| Selected indicators for net assets (Postbank at equity) |  | ||
|---|---|---|---|
| 2004 | 2005 | ||
| Equity ratio1) | % | 24.5 | 29.6 |
| Ratio of equity to fixed assets1) | % | 39.7 | 41.7 |
| Net debt | €m | –32 | 3,959 |
| Net gearing1) | % | –0.4 | 26.8 |
| Net interest cover | 10.6 | 20.1 | |
| Dynamic gearing ratio | years | 0 | 2.4 |
| 1) | Equity definition restated due to minority interest contained in equity since 2005. |
Net interest cover of 20.1 indicates that EBIT exceeds net interest payment liabilities by a factor of 20.1. This indicator is up by 9.5 percentage points on the previous year’s value.
The dynamic gearing ratio expresses the average number of years required to repay outstanding debt using the whole of the operating cash flow generated in the year under review. Accordingly, in 2005, net debt would have been paid by operating cash flow in 2.4 years. The increase compared with the previous year is once again attributable to the significant rise in net debt as a result of the acquisition of Exel.
